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Silicon Valley Bank Is Shut Down - Second Largest Bank Failure in HistoryGMAC Bank's New Online Savings Account
POSTED
ON BY Ken Tumin
Update 10/24/08: The yield has gone back up to 3.75% APY.
Update 10/17/08: The Online Savings Account yield has fallen to 3.60% APY.
Update 10/10/08: The Online Savings Account yield has increased from 3.55% to 3.75% APY.
Update 9/27/08: The new Online Savings Account is now listed at GMAC Bank's website. Account applications can now be done online.
GMAC Bank has just started a new online savings account with a yield of 3.55% APY for balances over $500 (3.45% APY for under $500). This is 55 basis points above the Money Market Savings yield. The main downside with the new Online Savings Account is that it has no check writing and no debit cards.
This new account isn't listed at GMAC Bank's website. It's only for existing customers with a Money Market Savings Account. According to the CSR, this just started, and they plan to make it available on their website for everyone sometime in the future.
My Experience Opening the Online Savings Account
A reader mentioned receiving a letter from GMAC with an invitation to switch his existing Money Market Savings into this Online Savings Account. I haven't received this letter yet, so I called and asked about it. The CSR said that I was eligible for this new account. The reader said the letter only gave the option of switching over the old account to this new one. However, the CSR said you can also just add this new online savings account and keep your old Money Market Savings Account. She said this could be done by phone, so I went ahead and had it done.
The CSR funded this account with money from my Money Market Savings Account. It was done very quickly. After the call, I logged in, and it was already set up with the money transfered. The new account also shows up in the transfer page so I can transfer into and out of this account using all my linked accounts.
The only little glitch was that it was listing the 3.45% APY instead of the 3.55% APY for a minimum balance of $500. I called back and the CSR confirmed that it should be 3.55% APY and said they will look into this. Since it's a new account, perhaps they're still a few small glitches.
Update 9/10/08: I logged into my account, and it now shows 3.55% APY for my new Online Savings Account. A GMAC rep actually called me about this yesterday. I asked again about the minimum balance requirements of this new account, and the CSR said that both the minimum balance and the fees are the same as the Money Market Savings Account.
Details of the Online Savings Account
Here are some details about this new Online Savings Account that I was told by the CSR. Let me know if you receive different info. Since it's new, there may be mistakes. They're mailing me a welcome kit which should include these details in writing.
I was happy that they allowed me to open a new account rather than convert my existing account. I don't use checks that often, but I do use them every now and then (can be useful for funding a CD).
The yield on GMAC's MMS account has been lagging for much of this year. It has remained at 3% APY while many others have been 3.50% and above. So I'm glad to see GMAC adding this account if it can allow them to be more competitive. This is similar to what Capital One has done with its Online Savings Account.
My Past Experience with GMAC's Money Market Savings Account
I've been very happy with my GMAC MMS account. The ACH transfers are fast. The holds are short. External links are easy to set up, and there doesn't seem to be a limit on the number of links. I have more details about this MMS account in my GMAC MMS account review. I also have the rate history of this account for the last two years. The yield has held at 3% APY since 2/29/08.
GMAC in the News
GMAC Bank's parent has been in the news lately due to its troubled mortgage lending arm, Residential Capital (ResCap). Latest news is that ResCap is is cutting 60% of its workforce to cope with the continued weakness in the housing and credit markets. According to the article, ResCap has posted 7 consecutive quarters of losses, totalling $7.2 billion. I don't know how this directly affects GMAC Bank which still has decent financial ratings. These are based on 3/31/08 data, but as you can see, ResCap has been having problems for a long time. GMAC Bank has a 4-star rating (sound) at Bankrate.com and a 4-star rating (excellent) at BauerFinancial.
Update 10/10/08: GMAC Bank's financial ratings for soundness have gone down since the initial post. Bankrate's safe & sound rating has gone down from 4 to 3 stars (performing). BauerFinancial's rating decreased from 4 stars to 3.5 stars (good). Both ratings are based on 6/30/08 data.
FDIC Coverage
As I recommend with any bank, make sure to keep your deposits under the FDIC limits. For issues on FDIC coverage above $100K, please refer to this recent post, and for more details, refer to this post. GMAC Bank accounts are FDIC insured (FDIC Certificate # 57803).
Thanks to the reader who mentioned this new account in the comments.
Update 10/17/08: The Online Savings Account yield has fallen to 3.60% APY.
Update 10/10/08: The Online Savings Account yield has increased from 3.55% to 3.75% APY.
Update 9/27/08: The new Online Savings Account is now listed at GMAC Bank's website. Account applications can now be done online.
GMAC Bank has just started a new online savings account with a yield of 3.55% APY for balances over $500 (3.45% APY for under $500). This is 55 basis points above the Money Market Savings yield. The main downside with the new Online Savings Account is that it has no check writing and no debit cards.
This new account isn't listed at GMAC Bank's website. It's only for existing customers with a Money Market Savings Account. According to the CSR, this just started, and they plan to make it available on their website for everyone sometime in the future.
My Experience Opening the Online Savings Account
A reader mentioned receiving a letter from GMAC with an invitation to switch his existing Money Market Savings into this Online Savings Account. I haven't received this letter yet, so I called and asked about it. The CSR said that I was eligible for this new account. The reader said the letter only gave the option of switching over the old account to this new one. However, the CSR said you can also just add this new online savings account and keep your old Money Market Savings Account. She said this could be done by phone, so I went ahead and had it done.
The CSR funded this account with money from my Money Market Savings Account. It was done very quickly. After the call, I logged in, and it was already set up with the money transfered. The new account also shows up in the transfer page so I can transfer into and out of this account using all my linked accounts.
The only little glitch was that it was listing the 3.45% APY instead of the 3.55% APY for a minimum balance of $500. I called back and the CSR confirmed that it should be 3.55% APY and said they will look into this. Since it's a new account, perhaps they're still a few small glitches.
Update 9/10/08: I logged into my account, and it now shows 3.55% APY for my new Online Savings Account. A GMAC rep actually called me about this yesterday. I asked again about the minimum balance requirements of this new account, and the CSR said that both the minimum balance and the fees are the same as the Money Market Savings Account.
Details of the Online Savings Account
Here are some details about this new Online Savings Account that I was told by the CSR. Let me know if you receive different info. Since it's new, there may be mistakes. They're mailing me a welcome kit which should include these details in writing.
- 3.55% APY for balances $500 and above
- 3.45% APY for under $500
- Minimum initial deposit is $50
- Minimum balance to avoid a monthly fee is $500
- $7.50 monthly fee if balance is under $500 ($5 with direct deposit)
- $10 fee for more than 6 withdrawals per month
- Internal withdrawals count towards the 6
- The 6 withdrawal limit applies separately to the savings and MMS
I was happy that they allowed me to open a new account rather than convert my existing account. I don't use checks that often, but I do use them every now and then (can be useful for funding a CD).
The yield on GMAC's MMS account has been lagging for much of this year. It has remained at 3% APY while many others have been 3.50% and above. So I'm glad to see GMAC adding this account if it can allow them to be more competitive. This is similar to what Capital One has done with its Online Savings Account.
My Past Experience with GMAC's Money Market Savings Account
I've been very happy with my GMAC MMS account. The ACH transfers are fast. The holds are short. External links are easy to set up, and there doesn't seem to be a limit on the number of links. I have more details about this MMS account in my GMAC MMS account review. I also have the rate history of this account for the last two years. The yield has held at 3% APY since 2/29/08.
GMAC in the News
GMAC Bank's parent has been in the news lately due to its troubled mortgage lending arm, Residential Capital (ResCap). Latest news is that ResCap is is cutting 60% of its workforce to cope with the continued weakness in the housing and credit markets. According to the article, ResCap has posted 7 consecutive quarters of losses, totalling $7.2 billion. I don't know how this directly affects GMAC Bank which still has decent financial ratings. These are based on 3/31/08 data, but as you can see, ResCap has been having problems for a long time. GMAC Bank has a 4-star rating (sound) at Bankrate.com and a 4-star rating (excellent) at BauerFinancial.
Update 10/10/08: GMAC Bank's financial ratings for soundness have gone down since the initial post. Bankrate's safe & sound rating has gone down from 4 to 3 stars (performing). BauerFinancial's rating decreased from 4 stars to 3.5 stars (good). Both ratings are based on 6/30/08 data.
FDIC Coverage
As I recommend with any bank, make sure to keep your deposits under the FDIC limits. For issues on FDIC coverage above $100K, please refer to this recent post, and for more details, refer to this post. GMAC Bank accounts are FDIC insured (FDIC Certificate # 57803).
Thanks to the reader who mentioned this new account in the comments.
--H
Per the CSR:
-The existing external links will work with both accounts.
-You can add beneficiaries at any time by phone or mail (nor sure about online). You need to give GMAC their name, DOB and physical address but not the beneficiary's SSN.
Thank you for choosing GMAC Bank. Absolutely, the Money Market Saving accounts are FDIC Insured up to $100,000.00 per depositor per account titling.
For further assistance please contact us via this secure email option or give our Customer Care Department a call and we will be happy to assist you with your banking needs. Our toll free number is 1-866-246-2265. You can reach us Monday through Friday from 9:00 am to 9:00 pm and Saturdays from 10:00 am to 5:00 pm EST.
Thank you,
PEllsworth
Customer Care
GMAC Bank
Has anyone received their conversion coupon yet? They claim they were mailed out 5 days ago.
I have several other high interest online accounts with check writing. I really dont need 2 accounts at GMAC. My main use for the GMAC account is as an ACH router to the many accounts I have that do not have their own ACH capability. I definately would rather get 3.55% than 3.0% !!!
I would change to MMSAs wit GMAC if I knew more about how the electronic transfer will work when I do not have a checking account with them. Anyone help instead of my having to call CS?
Wait a few days after opening the account before you start to worry. I opened one of these Online Savings accts last week with a balance over $500. I opted to open this acct in addition to my Money Mkt savings acct (rather than converting the latter), and the 3.55% APY was listed correctly when I checked my accounts on their Web site two nights ago.
Thanks again, Banking Guy, for the early heads-up on this account. I did not receive the letter from GMAC Bank, inviting me to convert my existing Money Mkt acct, until yesterday.
Oh, and for those who are reluctant to phone GMAC Bank in order to get information and answers from their customer support personnel, chill out. I have always found them to be pleasant and helpful on the phone. In fact, I opened this Online Savings acct by phone, transferring money from my Money Mkt acct to do so. It couldn't have been easier.
I believe the reason it shows 3.44% initially is because that is the lower default rate for balances below the minimum balance threshold ($500?).
Once your funds POST to the account (I believe this happens in the evenings after the business day has "closed") and your balance is above the minimum balance threshold, you'll immediately be bumped up to the higher 3.55% rate.
I believe this is why many of the posters here have seen their rate increase to 3.55% once they've come back to check their rates online after they have funded the account.
And...on the other issue:
Even though I received the letter I still called them up (using the phone number on the letter) on 9/17/2008 to open the higher rate online savings account rather than mailing it in. The truth is, I didn't want to shutdown my money market account (with check writing and debit card) or "convert" it to the online savings account - I wanted *both* accounts-, so I simply added/opened the online savings account and kept the money market account. I had no trouble doing this over the phone.
-DTS
Has anyone received this letter?
Do you know if they did hard pull on your credit when you open the new online saving? Thank you.
Dave